The Squeezebox, Xbox 360 and TV are connected to a Linksys WRT160N via ethernet - which is connected to another PC upstairs via wireless N. My media PC stores my music, the TViX stores my movies and I have another 500GB above the CD player attached to the TV for photo's or general stuff.

I prefer any PC equipment in the lounge to look good or be hidden - so the PC is hidden in a cupboard below the TV, the wireless router is flat with no antenna and the WD My Book hard drive looks pretty fantastic too.